Attack on Sydney Harbour

The Imperial Japanese Navy originally intended to use six submarines in the attack on Sydney Harbour: B1-type submarines I-21, I-27, I-28, and I-29, and C1-type submarines I-22 and I-24.[2]^: 161[3][4] The six submarines made up the Eastern Attack Group of the 8th Submarine Squadron, under the command of Captain Hankyu Sasaki.[2]^: 161[5]^: 59

On 8 June 1942, I-21 and I-29—each carrying a Yokosuka E14Y1 "Glen" floatplane for aerial reconnaissance—scouted various Australasian harbours to select the ones most vulnerable to attack by midget submarines.[6]^: 61[2]^: 163 I-21 scouted Nouméa, Suva, then Auckland, while I-29 went to Sydney.[2]^: 162

On 11 May, I-22, I-24, I-27, and I-28 were ordered to proceed to the Japanese naval base at Truk Lagoon, in the Caroline Islands, to each receive a Ko-hyoteki-class midget submarine.[6]^: 61 I-28 failed to reach Truk; she was torpedoed on the surface by the US submarine USS Tautog on 17 May.[6]^: 61–62 The three remaining submarines left Truk around 20 May for a point south of the Solomon Islands.[6]^: 62 I-24 was forced to return a day later when an explosion in her midget submarine's battery compartment killed the midget's navigator and injured the commander.[2]^: 164 The midget submarine intended for I-28 replaced the damaged midget.[2]^: 164

USS Chicago in Sydney Harbour on 31 May 1942

The naval officer-in-charge of Sydney Harbour at the time of the attack was Rear Admiral Gerard Muirhead-Gould of the Royal Navy.[5]^: 30 On the night of the attack, three major vessels were present in Sydney Harbour; the heavy cruisers USS Chicago and HMAS Canberra, and the light cruiser HMAS Adelaide.[2]^: 193–94 Other warships in the harbour included: destroyer tender USS Dobbin, auxiliary minelayer HMAS Bungaree, corvettes HMAS Whyalla, HMAS Geelong, and HMIS Bombay, armed merchant cruisers HMS Kanimbla and HMAS Westralia, and Dutch submarine K-IX.[2]^: 193–94 A converted ferry—HMAS Kuttabul—was alongside at Garden Island where she served as a temporary barracks for sailors transferring between ships.[5]^: 143 The hospital ship Oranje had also been in the harbour, but departed an hour before the attack.[2]^: 190

Before dawn on 29 May,[upper-roman 1] I-21's floatplane, piloted by Ito Susumu,[11]^: 340 performed a final reconnaissance flight over Sydney Harbour, with the mission of mapping the locations of the major vessels and of the anti-submarine net.[8]^: 71[5]^: 87 Multiple observers spotted the floatplane but assumed it was a US Navy Curtiss Seagull.[6]^: 64[2]^: 189–93 No alarm was raised until 05:07, when it was realised that the only ship in the area carrying Seagulls was the U.S. cruiser Chicago, and all four of her aircraft were on board.[6]^: 64[2]^: 189–93 Richmond Air Force Base launched Wirraway fighters, which failed to locate I-21 or the floatplane.[7]^: 193 Therefore, the reconnaissance flight did not result in the authorities in Sydney taking any special defence measures.[6]^: 64 The floatplane was seriously damaged on landing and had to be scuttled, but both aircrew survived.[7]^: 192

The Japanese planned to launch the midgets one after the other between 17:20 and 17:40, from points 5–7 nmi (5.8–8.1 mi; 9.3–13.0 km) outside Sydney Harbour.[2]^: 205 The first midget was to pass through the Heads just after 18:30, but heavy seas delayed her by over an hour.[2]^: 205 The other two midgets followed at twenty-minute intervals and were similarly delayed.[2]^: 205

The choice of targets was left up to the midget commanders, with advice that they should primarily target aircraft carriers or battleships, with cruisers as secondary targets.[12] The midgets were to operate to the east of the Harbour Bridge, although if no suitable targets were to be found in this area they were to move under the Bridge and attack a battleship and large cruiser believed to be in the inner harbour.[12] When the second reconnaissance flyover revealed that the expected British battleship—HMS Warspite—was nowhere to be found, USS Chicago became the priority target.[8]^: 75, 79

After completing their mission, the midgets were to depart Sydney Harbour and head south for 20 nmi (23 mi; 37 km) to the recovery point off Port Hacking.[8]^: 79 Four of the mother submarines would be waiting in an east–west line 16 km (8.6 nmi; 9.9 mi) long, with the fifth waiting 6 km (3.2 nmi; 3.7 mi) further south.[8]^: 79

Midget submarine M-14—launched from I-27—was the first to enter Sydney Harbour.[6]^: 67 The Middle Head – South Head loop detected it at 20:01, but dismissed the reading due to heavy civilian traffic.[2]^: 206 At 20:15, a Maritime Services Board watchman spotted the midget after it passed through the western gap, collided with the Pile Light, then reversed and trapped its stern in the net.[8]^: 105 The submarine's bow broke the surface; the watchman rowed toward it to determine what it was and then rowed to the nearby patrol boat HMAS Yarroma to report his finding.[8]^: 106[2]^: 208 Despite efforts by Yarroma to pass on this information, Sydney Naval Headquarters did not receive the report until 21:52.[2]^: 208[8]^: 108 HMAS Yarroma and HMAS Lolita were dispatched to investigate.[2]^: 208 Upon confirming that the object in the net was a "baby submarine", Lolita dropped two depth charges while Yarroma's commander requested permission from Sydney Naval Headquarters to open fire.[8]^: 115[2]^: 209 The depth charges failed to detonate, as the water was too shallow for the hydrostatic fuse setting.[2]^: 209 At 22:35, while Yarroma was waiting for permission to fire, and Lolita was setting up to deploy a third depth charge, the two crewmen on M-14 activated one of the submarine's scuttling charges, killing themselves and destroying the submarine's forward section.[2]^: 209[8]^: 116–17

Muirhead-Gould gave the general alarm, along with orders for ships to take anti-submarine measures, at 22:27; the alarm was repeated at 22:36 with advice for ships to take precautions against attack, as an enemy submarine might be in the harbour.[2]^: 210[8]^: 119 At the time of the first alarm, Sydney Harbour was closed to external traffic, but Muirhead-Gould ordered ferries and other internal traffic to continue, as he believed that having multiple ships travelling around at speed would help force any submarines to remain submerged.[8]^: 119

Midget submarine M-24[upper-roman 2] was the second to enter the harbour. HMAS Falie grazed M-24's hull and reported the contact to command.[13] The report was not followed up. M-24 crossed the indicator loop undetected at 21:48, and at approximately 22:00 followed a Manly ferry through the anti-submarine net.[6]^: 67[2]^: 210 At 22:52, M-24 was spotted by a Chicago searchlight operator less than 500 m (1,600 ft) to the moored cruiser's starboard, and on a course roughly parallel to the ship's facing.[2]^: 210[8]^: 123 Chicago opened fire with a 5 in (130 mm) gun and a quadruple machinegun mount, but inflicted minimal damage as the weapons could not depress far enough.[2]^: 211 Some of the 5 in (130 mm) shells skipped off the water and hit Fort Denison's Martello tower, while fragments were later found in the suburbs of Cremorne and Mosman.[8]^: 125 The senior officer present aboard Chicago ordered the crew to begin preparing for departure, and for USS Perkins to begin an anti-submarine screening patrol around the cruiser, orders that were revoked by the sceptical Captain Howard Bode when he arrived on board at around 23:30.[8]^{: 127, 133}

HMAS Whyalla and Geelong also fired upon M-24 as it fled west toward the Sydney Harbour Bridge, before the midget was able to submerge and escape.[2]^: 212 When it returned to periscope depth, the midget found itself west of Fort Denison.[2]^: 212 It turned and sailed east for about 1 nmi (1.2 mi; 1.9 km), then took up a firing position south-west of Bradley's Head, from where its commander could see Chicago's stern silhouetted against the construction floodlights at Garden Island's new Captain Cook Graving Dock.[2]^: 212–14

Midget submarine M-21—from I-22—probably entered the harbour at the same time that USS Chicago opened fire on M-24.[6]^: 68 The unarmed Naval Auxiliary Patrol boat Lauriana (later commissioned HMAS Lauriana) spotted M-21 and illuminated the submarine's conning tower, while sending an alert signal to the Port War Signal Station at South Head, and the nearby anti-submarine vessel HMAS Yandra.[6]^: 68 Yandra attempted to ram the submarine, lost contact, regained contact at 23:03, and fired a full pattern of six depth charges.[14][2]^: 213 At the time of the attack, it was assumed that the depth charges had destroyed or disabled the midget, but M-21 survived.[2]^: 213 Historians believe that the midget took refuge on the harbour floor and waited until the Allied vessels had moved away before it resumed the attack.[2]^: 213

HMAS Kuttabul following the Japanese attack

At 23:14, Muirhead-Gould ordered all ships to observe blackout conditions.[2]^: 213–14 Just after 23:30, he set off on a barge towards the boom net, to make a personal inspection.[8]^: 135 The Admiral reached Lolita at about midnight and indicated to her crew that he did not take the reports of enemy submarines seriously, reportedly saying: "What are you all playing at, running up and down the harbour dropping depth charges and talking about enemy subs in the harbour? There's not one to be seen."[8]^: 135 The crew reiterated that a submarine had been seen, but Muirhead-Gould remained unconvinced and before he left, added sarcastically: "If you see another sub, see if the captain has a black beard. I'd like to meet him."[8]^: 136

Despite the blackout order, the Garden Island floodlights remained on until 00:25.[2]^: 213–14 About five minutes later, M-24 fired the first of its two torpedoes; it delayed firing the second torpedo for several minutes as the midget submarines would lose longitudinal stability immediately after firing a torpedo.[2]^: 214 Historians are divided as to the exact paths of the torpedoes relative to Chicago, although all agree that the US cruiser was the intended target. Both torpedoes missed Chicago, while one torpedo may have also passed close to Perkins' starboard bow.[15][8]^: 139 One of the torpedoes continued underneath the Dutch submarine K-IX and HMAS Kuttabul, then hit the breakwater Kuttabul was tied up against.[8]^: 139 The explosion broke Kuttabul in two and sank her, and damaged K-IX.[5]^: 143[2]^: 215 The attack killed 19 Royal Australian Navy and two Royal Navy sailors, and wounded another 10.[16] The explosion shook residences in the area and damaged Garden Island's lights and telecommunications.[2]^: 215 The other torpedo ran aground on the eastern shore of Garden Island without exploding.[2]^: 215 M-24 then dived and moved to leave the harbour.[2]^: 216

The unexploded torpedo at Garden Island several days after the attack

A crossing over the indicator loop that was recorded at 01:58 was initially believed to be another midget submarine entering the harbour, although later analysis showed that the reading indicated an outbound vessel and therefore most likely represented M-24's exit.[6]^: 70 M-24 did not return to its mother submarine, and its fate remained unknown until 2006.[17][5]^: 189

Ships were ordered to make for the open ocean. Chicago left her anchorage at 02:14, leaving a sailor behind on the mooring buoy in her haste to depart.[2]^: 216 Bombay, Whyalla, Canberra, and Perkins began their preparations to depart.[8]^: 153–54

Just before 03:00, as Chicago was leaving the harbour, the lookouts spotted a submarine periscope passing alongside the cruiser.[2]^: 218 At 03:01, the indicator loop registered an inbound signal; M-21 was re-entering Sydney Harbour after recovering from the attack four hours previously.[2]^: 218 HMS Kanimbla fired on M-21 in Neutral Bay at 03:50, and at 05:00, three auxiliary patrol boats—HMAS Steady Hour, Sea Mist, and Yarroma—spotted the submarine's conning tower in Taylors Bay.[2]^: 218 The patrol boats had set their depth charge fuses to 15 m (49 ft), and when Sea Mist passed over where the submarine had just submerged and dropped a depth charge, she had only five seconds to clear the area.[2]^: 218 The blast damaged M-21, which inverted and rose to the surface before sinking again.[2]^: 219 Sea Mist dropped a second depth charge, which damaged one of her two engines in the process and prevented her from making further attacks.[2]^: 219 Steady Hour and Yarroma continued the attack, dropping seventeen depth charges on believed visual sightings and instrument contacts of the midget over the next three and a half hours.[2]^: 219 At some point during the night, the crew of M-21 killed themselves.[2]^: 219

At 04:40, HMAS Canberra recorded that the Japanese may have fired torpedoes at her.[8]^: 160–62 This may have been one of many false alarms throughout the night. However, M-21 had attempted to fire its two torpedoes, but failed because of damage to the bow either from HMAS Yandra's ramming or depth charges, or a possible collision with USS Chicago, making it possible that M-21 attempted to attack the cruiser.[8]^: 160–62 The observer aboard Canberra may have seen bubbles from the compressed air released to fire the torpedoes.[8]^: 160–62

Four of the submarines began operations against Allied merchant shipping. I-21 patrolled north of Sydney, while I-24 patrolled south of Sydney.[2]^: 239 I-27 began searching off Gabo Island for ships departing Melbourne, and I-29 travelled to Brisbane.[2]^: 239 I-22 left the group to conduct reconnaissance operations, first at Wellington and Auckland in New Zealand, and then at Suva in Fiji.[2]^: 239

Between 1 and 25 June, when the four submarines arrived at Kwajalein Atoll in the Marshall Islands to re-supply before proceeding to Japanese shipyards for maintenance, the four submarines attacked at least seven Allied merchant vessels.[2]^: 254 Three of these were sunk: Iron Chieftain by I-24 on 3 June, Iron Crown by I-27 on 4 June, and Guatemala by I-21 on 12 June.[2]^{: 241, 244, 253} The first two attacks resulted in 12 and 37 fatalities respectively, though the third attack killed no one.[5]^{: 191, 193, 199} The attacks forced the authorities to institute changes in merchant traffic; travel north of Melbourne was restricted until a system of escorted convoys was established.[7]^: 195

I-21 was the only submarine to return to Australian waters, where she sank three ships and damaged two others during January and February 1943.[2]^{: 254, 260–61} During her two deployments, I-21 sank 44,000 long tons (45,000 t) of Allied shipping, which made her the most successful Japanese submarine to operate in Australian waters.[18]

A house in Sydney's Eastern Suburbs damaged by a Japanese shell

On the morning of 8 June, I-24 and I-21 briefly bombarded Sydney and Newcastle.[7]^: 194 Just after midnight, I-24 surfaced 9 mi (14 km) south-south-east of Macquarie Lighthouse.[2]^: 247 The submarine's commander ordered the gun crew to target the Sydney Harbour Bridge.[2]^: 247 They fired 10 shells over a four-minute period; nine landed in the Eastern Suburbs and one landed in water.[2]^: 248 I-24 then crash dived to prevent successful retaliation by coastal artillery batteries.[2]^: 248–49 Only one shell detonated, and the only injuries inflicted were cuts and fractures from falling bricks or broken glass when the unexploded shells hit buildings.[2]^: 249 A United States Army Air Forces pilot, 1st Lieutenant George Cantello, based at Bankstown Airport disobeyed orders and took off to try and locate the source of the shelling, but was killed when engine failure caused his Airacobra to crash in a paddock at Hammondville.[19] In 1988, following efforts by residents and the US Consulate in Sydney, the City of Liverpool established a memorial park, the Lt. Cantello Reserve, with a monument in his honour.[19][20][21]

At 02:15, I-21 shelled Newcastle, from 9 km (4.9 nmi; 5.6 mi) north-east of Stockton Beach.[2]^: 250 She fired 34 shells over a 16-minute period, including eight star shells.[2]^: 250 The target of the attack was the BHP steelworks in the city.[5]^: 197 However, the shells landed over a large area, causing minimal damage and no fatalities: the only shell to detonate damaged a house on Parnell Place, while an unexploded shell hit a tram terminus.[5]^: 197[2]^: 251 Fort Scratchley returned fire, the only time an Australian land fortification has fired on an enemy warship during wartime, but the submarine escaped unscathed.[2]^: 251[22]

The Allies failed to respond adequately to several warnings of Japanese activity off the east coast of Australia prior to the attack; they simply ignored the warnings or explained them away. They attributed the unsuccessful attack on the freighter Wellen on 16 May to a single submarine, and assumed it had departed Australian waters immediately after the attack.[5]^: 174 The first reconnaissance flight went unnoticed, and although FRUMEL intercepted the report and distributed it to Allied commanders on 30 May, Muirhead-Gould apparently did not react.[2]^: 170–71 New Zealand naval authorities detected radio chatter between the Japanese submarines on 26 and 29 May, and although they could not decrypt the transmissions, radio direction finding indicated that a submarine or submarines were approaching Sydney.[5]^: 174 The Allies considered dispatching an anti-submarine patrol in response to the 29 May fix, but were unable to do so as all anti-submarine craft were already committed to protecting a northbound troop convoy.[7]^: 192 The only response to the second reconnaissance flight on 29 May was the launching of search planes.[2]^: 193 No other defence measures were put into place.[2]^: 193 Although the midget attack on Diego Suarez in Madagascar occurred on the morning of 31 May (Sydney time), the Allies sent no alert to other command regions, as they believed that Vichy French forces had launched the attack.[2]^: 198

Muirhead-Gould in May 1941

Historians have questioned the competence of the senior Allied officers. Muirhead-Gould had been hosting a dinner party on the night of the attack, and one of the main guests was the senior United States Navy officer in Sydney Harbour, Captain Howard Bode of USS Chicago.[8]^: 87 Both officers were sceptical that any attack was taking place.[8]^: 135 Muirhead-Gould arrived aboard HMAS Lolita at approximately midnight, an action he described as attempting to learn about the situation. But members of Lolita's crew later recounted that when Muirhead-Gould came aboard he immediately chastised the patrol boat's skipper and crew, and quickly dismissed their report.[8]^: 135[5]^: 136 Junior officers on Chicago provided similar descriptions of Bode's return on board, and members of both crews later claimed that Muirhead-Gould and Bode were intoxicated.[8]^: 133–35 It was only after the destruction of HMAS Kuttabul that both officers began to take the attack seriously.[8]^: 142–43

During the attack, there were several delays between events and responses to them. Over two hours passed between the observation of M-14 in the boom net and Muirhead-Gould's first order for ships to commence anti-submarine actions.[6]^: 72 It took another two hours to mobilise the auxiliary patrol boats, which did not leave their anchorage for a further hour.[6]^: 72 Part of these delays was due to a lack of effective communications.[6]^: 73 None of the auxiliary patrol craft in the harbour had radio communications, so all instructions and reports came from signal lights via the Port War Signal Station or Garden Island, or by physical communication via launches.[6]^: 73[5]^: 176 In Muirhead-Gould's preliminary report on the attack, he stated that the Port War Signal Station was not designed for the volume of communications traffic the attack caused.[23] Telephone communications with Garden Island were unreliable during the early part of the attack, and then the first torpedo explosion disabled them completely.[2]^: 211[6]^: 73

The need to keep information secret may also have contributed to the delays and the defenders' scepticism.[9]^: 194–95 As the auxiliary patrol boat crews, the indicator loop staff, and other personnel manning defensive positions would have been outside 'need to know' and would not have been informed about any of the incidents prior to the attack, they would not have been alert, contributing to the disbelief demonstrated in the early hours of the attack.[9]^: 194–95

The main flaw in the Japanese plans was the use of midget submarines for the primary attack. Midget submarines were originally intended to operate during fleet actions: they would be released from modified seaplane carriers to run amok through the enemy fleet.[2]^: 68 This concept went out of favour as changing Japanese naval thinking and experience led to recognition that naval warfare would centre around carrier-supported aerial combat.[2]^: 71 As a result, the midget program's focus changed to the infiltration of enemy harbours, where they would attack vessels at anchor.[2]^: 71 This concept failed completely during the attack on Pearl Harbor, where the midgets had no effect, and tying up 11 large submarines for six weeks in support of further midget submarine attacks on Sydney and Diego Suarez proved a waste of resources.[5]^: 58[2]^: 291

Moreover, the failures at Sydney Harbour and Diego Suarez demonstrated that the improvements to the midget submarines made after Pearl Harbor had not increased the overall impact of the midget program.[5]^: 58[2]^: 291 The modifications had various effects. The ability to man and deploy the midgets while the mother ships were submerged prevented the Army coastal radars from detecting the mother submarines.[9]^: 188 However, the midgets were still difficult to control, unstable, and prone to surfacing or diving uncontrollably.[2]^: 70 These manoeuvrability issues contributed to M-14's entanglement in the anti-submarine net, and the repeated detection of M-21 and M-24.

Beyond the use of the unreliable midgets, historians have identified areas in the plan of attack where the Japanese could have done significantly more damage. If the Japanese midget submarines had conducted a simultaneous, co-ordinated attack, they would have overwhelmed the defences.[9]^: 188 A chance for more damage came following the destruction of Kuttabul, when several naval vessels headed to sea, including USS Chicago, USS Perkins, Dutch submarine K-IX, HMAS Whyalla, and HMIS Bombay.[6]^: 70 The five mother submarines were already en route to the Port Hacking recovery position, and although Sasaki's plan at Pearl Harbor had been to leave some submarines at the harbour mouth to pick off fleeing vessels, he did not repeat this tactic.[8]^: 155

• 
  M-21 being raised by a floating crane on 10 June 1942
• 
  The wreckage of M-21

Several factors beyond the control of any of the combatants contributed to the survival of USS Chicago. At the time of M-24's attack on Chicago, the latter had spent some time preparing to depart from Sydney Harbour, and although still moored and stationary, was producing large volumes of white smoke as the boilers warmed up.[5]^: 137 This smoke, streaming aft under the influence of the wind, and contrasting against the dark, low-lying cloud, may have given the impression that Chicago was moving, causing M-24 to lead the target when firing its torpedoes, and consequently sending its torpedoes across the bow.[5]^: 137–39 Another factor that may have influenced Chicago's survival was the extinguishing of Garden Island's floodlights minutes before M-24 fired its first torpedo, impeding targeting.[6]^: 73

A crowd looking at a shell hole at Woollahra on 8 June 1942

The bombardments failed to cause significant physical damage, but had a major psychological impact on the residents of Sydney and Newcastle. Due to the inaccuracy of the submarines' range-finding equipment, coupled with the unstable firing platform of a submarine at sea, specific targeting was impossible.[2]^: 250 The intention of the submarine bombardment was to frighten the population of the target area.[2]^: 250

The failure of the majority of the shells to detonate may have had various causes. As the submarines fired armour-piercing shells, intended for use against steel ship hulls, the relatively softer brick walls may have failed to trigger the impact fuses.[2]^: 249 Sea water may have degraded the shells, which the Japanese had stored in deck lockers for several weeks.[2]^: 249 The age of the shells may also have been a factor; some of the shells recovered from the Newcastle bombardment were found to be of English manufacture: surplus munitions from World War I.[5]^: 197

In Sydney, fear of an impending Japanese invasion caused people to move west; housing prices in the Eastern Suburbs dropped, while those beyond the Blue Mountains rose significantly.[2]^: 258 The attack also led to a significant increase in the membership of volunteer defence organisations, and strengthening of defences in Sydney Harbour and Port Newcastle.[24]

The composite midget submarine at the Australian War Memorial in 2007.

The Allies located and recovered M-21 on 3 June and M-14 on 8 June.[8]^{: 209, 219} Although both were damaged during the attack, it was possible to assemble a complete submarine from the two vessels.[6]^: 72 The centre section of the rebuilt submarine was mounted on a trailer and taken on a 4,000 km (2,500 mi) tour throughout southern New South Wales, Victoria, and western South Australia.[6]^: 72[8]^: 250 The purpose of the tour was twofold; it allowed Australians to see a Japanese midget submarine up close, and was used to raise A£28,000 for the Naval Relief Fund and other charities.[6]^: 72[27] The submarine arrived at the Australian War Memorial in Canberra on 28 April 1943, flying the White Ensign and a paying-off pennant.[6]^: 72 The submarine was originally displayed outside the museum in three separate pieces,[8]^: 251 but was moved inside in the 1980s due to heavy vandalism; on one occasion in 1966, a group of university students painted it bright yellow in response to The Beatles' song Yellow Submarine.[8]^: 253–55 The composite submarine was restored and remains on display inside the Memorial as part of a permanent exhibition on the attack, next to the recovered wheelhouse of HMAS Kuttabul.'[8]^: 253–55 The conning tower from M-21 is on display at the Royal Australian Navy Heritage Centre on Garden Island.[8]^: 251 Leftover material from M-21 was melted down and made into souvenirs following the construction of the combined vessel.[8]^: 253

Submarine M-21 Conning Tower on display at the Royal Australian Navy Heritage Centre, Sydney

Over the 64 years following the disappearance of M-24 after the attacks, more than 50 people approached the Royal Australian Navy claiming to have found the submarine.[28] All of these claims were found to be false.[28] One early theory about the midget's fate was that it was damaged or destroyed, along with M-21, in or around Taylors Bay, which would account for reports from Steady Hour and Yarroma of multiple submarines during their three-hour attack against M-21.[6]^: 71[2]^: 217 A second theory was that the midget attempted to return to the mother submarines but exhausted its battery power before reaching the Port Hacking recovery point and would therefore be outside and to the south of Sydney Heads.[2]^: 217 The third theory was that the midget's crew decided to avoid endangering the five larger submarines during the recovery process, and either ran straight out to sea or headed north.[2]^: 184

A group of seven amateur scuba divers solved the mystery in November 2006, when they found a small submarine sitting upright on the seabed, 55 metres (180 ft) below sea level and approximately 5 kilometres (2.7 nmi; 3.1 mi) from Bungan Head, off Sydney's Northern Beaches.[17][29] Commander Shane Moore, the officer responsible for the Royal Australian Navy's heritage collection, confirmed that the wreck was M-24 after viewing footage from multiple dives, along with measurements the group had taken.[17] The wreck had several bullet holes in it, most likely from Chicago's quadruple machine-gun mount.[17] The location of the wreck was kept secret by both the divers and the navy, with Defence Minister Brendan Nelson promising to have the wreck protected as a war grave.[17] The wreck was gazetted on 1 December 2006 as a heritage site.[30] A 500 m (1,600 ft) exclusion zone was established around the wreck site, and any vessel entering the zone is liable to a fine under New South Wales law of up to A$1.1 million, with additional fines and confiscation of equipment under Commonwealth law.[8]^: 255 Shore- and buoy-mounted surveillance cameras and a sonar listening device further protect the site.[8]^: 255

On 7 February 2007, during JMSDF Admiral Eiji Yoshikawa's visit to Australia, Yoshikawa and RAN Vice Admiral Russ Shalders presided over a ceremony held aboard HMAS Newcastle to honour M-24's crew.[31] Relatives of the midget submarines' crews, one of the survivors from Kuttabul, and dignitaries and military personnel from Australia and Japan attended another ceremony on 6 August 2007 at HMAS Kuttabul.[28] HMAS Melbourne then carried relatives of M-24's crew to the wreck site, where they poured sake into the sea before being presented with sand taken from the seabed around the submarine.[28]

In May 2012, the NSW state government announced that, with the approval of the Japanese government and the submariners' families, divers would be allowed to observe the M-24 wreck for a short period of time.[29] Divers would enter a ballot for places on controlled dives run on several days.[29] If successful, opening the site would become an annual event to commemorate the attack.[29]